The Intermediary – December 2025 - Flipbook - Page 29
A YEAR IN REVIEW
Feature
Indeed, in a year where economic and
regulatory uncertainty lingered – particularly in
the private rental sector (PRS) – this appetite
stood out.
Hugo Davies, chief capital officer and
managing director for mortgages at
LendInvest, adds: “Buy-to-let (BTL) operated
through limited companies as portfolios
remained one of the strongest parts of
the market, alongside [houses in multiple
occupation (HMOs)], conversions and retrofitled projects, and mid-market residential.”
For brokers, however, early 2025 required
the careful navigation of affordability
constraints. As Louis Mason of
Oportfolio observes, the year began
with a notable shift in tone: “We saw
a clear increase in more flexible fixed
term options from lenders and more
solutions to affordability issues.
“For lenders, tighter margins
and a slower property market
pushed them to change their criteria,
streamline processing times, and introduce
targeted incentives to attract more borrowers.
“For brokers, the shift meant more complex
conversations. Clients wanted reassurance,
strategy and clarity, not just a ‘good’ rate.”
Spring changes
These tax adjustments were felt acutely in
a market already dealing with affordability
pressures and the early stages of softening
Despite much speculation, Labour’s Spring
inflation. Borrowers who had spent 2023 and
Statement did not land with a bang but a
2024 waiting for pricing to stabilise found
whimper – offering very little in the way of
themselves facing a new cost layer, even as rates
substantive housing measures, at a time
were beginning to ease.
when the market was searching for clearer
direction. For many, the muted announcement
Mason notes that “borrowers who had
delayed decisions in 2023/24 began returning
compounded the sense of quiet optimism and
to the market confidence increased and as
hesitation that had characterised the opening
affordability improved marginally,” yet many now
months of the year.
had to recalibrate calculations to absorb these
With the disappointment of the Spring
Statement still lingering, attention quickly
shifted to April’s long-scheduled Stamp Duty
tax changes.
The shift also reinforced regional disparities.
Spencer notes that “2025 quickly became a
threshold adjustments. Under the new rules, the
buyers’ market in the South of England with lots
zero-rate threshold for main residences fell from
of stock but fewer transactions” – a dynamic that
£250,000 to £125,000, while the first-time buyer
was reinforced by the Stamp Duty transition.
threshold reduced from £425,000 to £300,000.
First-Time Buyers Relief also narrowed,
dropping from £625,000 to £500,000.
According to Nick Jones, mortgage sales
and marketing director at Access FS, the effect
was immediate. He says: “Falling rates spurred
The combined effect was a marked rush of
completions in March followed by a noticeably
quieter April, as brokers and buyers reworked
affordability models under the new tax structure
and adjusted expectations for the year ahead.
an initial surge in residential sales, easing
Easing rates
affordability for borrowers. But the Stamp Duty
While inflation remained stubbornly above the
threshold reduction pushed more first-time
Bank of England’s 2% target, it nevertheless
buyers into higher tax bands, delaying deals and
continued to soften throughout late spring and
squeezing budgets. Lenders responded positively
into early summer. Swap rates, which had been
though, launching some exceptional low-deposit
volatile through much of 2024, finally began to
mortgage products.”
settle into a more predictable pattern.
p
December 2025 | The Intermediary
The Interme
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